We have maintained our Neutral recommendation on
ONEOK Partners LP
). The partnership currently has a Zacks Rank #3 (Hold).
Why the Reiteration?
ONEOK Partners has a collection of geographically-diversified
assets and its gathering and processing businesses operate in
five different basins. The partnership's future organic growth is
expected to come from the Williston Basin, Cana-Woodford Shale,
Woodford Shale, Granite Wash areas where it owns and operates the
vast majority of its gathering assets. In addition, ONEOK
Partners continues to focus on adding new supplies, which will
subsequently enable it to serve a large customer base.
In Apr 2013, ONEOK Partners completed three of its important
projects - Bakken natural gas liquids (NGL) pipeline, Stateline
II plant and an ethane header pipeline. To reap benefits of the
vast resources of the Bakken Shale, the operators are making
strategic investments in the infrastructure projects to cater to
the rising demand from natural gas operators. We believe that
continuous investment in the Bakken Shale and its adjacent
locations will play a crucial role in meeting the ever increasing
demand for fossil fuel. Additionally, these initiatives will
likely improve ONEOK Partners' forthcoming performance.
On the flip side, ONEOK Partners earns a significant part of its
revenues as payment for gathering and processing, and
transportation and storage services. A decline in commodity
prices, particularly natural gas, crude oil and NGL, may result
in lesser payments for these services, thus significantly
impacting its cash flow.
Other Stocks to Consider
The other stocks in the industry that are presently performing
Delek Logistics Partners LP
Summit Midstream Partners, LP
) with a Zacks Rank #1 (Strong Buy), and
Energy Management LLC
) with a Zacks Rank #2 (Buy).
DELEK LOGISTICS (DKL): Free Stock Analysis
ENBRIDGE ENERGY (EEQ): Free Stock Analysis
ONEOK PARTNERS (OKS): Free Stock Analysis
SUMMIT MIDSTRM (SMLP): Free Stock Analysis
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